The Australian dollar is gaining its strength, as opposed to the Sterling which is at 0.05% lower than the American dollar, suffering six days of losses against the American currency.
With the festivities around the corner, the market is either closed or traded lightly, with the dollar up 0.06% at 97.715. Being a rather stable currency, the American dollar benefited from the risk aversion tactics throughout the year and has been up approximately 1.6% throughout the entire year as the American economy has been strong and out-performing many other markets throughout the year. However, the Australian dollar has had a five month high against the greenback (American dollar), according to CNBC. The report continues with the theory that the Aussie market tends to benefit when the China market is doing well.
While the Australian dollar has been struggling throughout 2019, traders believe that a catalyst is needed to help it reach a new high. The currency has been fluctuating due to the trade war between America and China. Australia is unwittingly caught in the middle, with China ultimately choosing to trade with America after Australia showed their allegiance to America over the debacle over taxes. This has caused a furor as Australia scrambled to fill up the void that China will be leaving. However, despite the dip in the Australian dollar, it is currently at a rebound thanks to the end of the trade war and is now hovering at a cusp and has been since early November and investors are confident that if the Australian dollar does not manage to peak soon, it will crash in the following weeks and decline in 2020.
On the other hand, the British pound has been suffering ever since the beginning of Brexit, causing it to fluctuate alongside the Euro. While it had a surge on the 12th of December when Boris Johnson’s Conservative Party won a majority in the UK general election, the British pound has lost all of their gains and then some as worries regarding the European Union departure resurfaced.
Following Prime Minister Boris Johnson’s ban on trade talks with the EU has many investors fretting over whether the country will crash out without first securing a trade deal. Experts predict that the pound will only start to gain again after the new years, or when the whole situation with Brexit blows over and nobody can be sure when that will be as it has been delayed again and again ever since polling concluded.
Those over at Forbes foresee a lull in the currency front but are sure that any new developments regarding the American-Chinese trade negotiations will affect the Australian dollar and cause further movement, depending on the outcome but Brexit fears continue to weigh down the Pound.
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